Russ Oil-Gas

MOSCOW, April 6 (RIA Novosti) - Gazprom's deal to buy a stake in the Sakhalin II oil and gas project will be completed in April, the Russian industry and energy minister said Friday. "In April, all decisions, not just legal, on the deal, will be completed," Viktor Khristenko said. Khristenko said Gazprom, Shell, Mitsubishi and Mitsui are finalizing legal documents. The ambitious oil and gas project, formerly led by Anglo-Dutch oil major Shell, was subjected to months of intense pressure last year from Russian authorities, who accused it of causing serious environmental damage to Sakhalin Island, including deforestation, toxic waste dumping and soil erosion. Earlier, Russia's Audit Chamber assessed environmental damage inflicted by the project at $5 billion. Russian energy giant Gazprom [RTS: GAZP] took over project operator Sakhalin Energy in late 2006. In December 2006, Gazprom acquired 50% plus one share in the Sakhalin II project for $7.45 billion. Shell previously held a 55% stake, while Japan's Mitsui and Mitsubishi owned 25% and 20%, respectively. Sakhalin II comprises an oil field with associated gas, a natural gas field with associated condensate, a pipeline, a liquefied natural gas plant (LNG), and an LNG export terminal. Most of the LNG from the project will be exported to Japan, which is seeking to diversify its energy imports. The project's two fields have estimated reserves of 150 million metric tons (1.1 billion barrels) of oil and 500 billion cubic meters of natural gas.